Verizon rejects unlimited data, says those users 'tend to be abusive' of the privilege

Ed Oswald
Verizon rejects unlimited data, says those users 'tend to be abusive' of the privilege
CFO Fran Shammo put any questions to rest -- for now at least -- as to whether Verizon customers will see unlimited data any time soon. But will it be forced to change by the rest of the wireless industry?

While the wireless industry is moving back to unlimited data, one carrier is not. Verizon chief financial officer Fred Shammo told attendees at the Goldman Sachs Communacopia Conference in New York on Thursday that his company doesn’t think you need it, and slammed current offerings.

“At the end of the day, people don’t need unlimited plans,” Shammo said. While this is not the first time he’s said this — in March he claimed unlimited data “doesn’t work in an LTE environment”, and in 2011 he helped Verizon move away from unlimited plans — it’s now an entirely different market.

Sprint and T-Mobile rolled out one-size-fits-all unlimited plans at the beginning of this month, and AT&T offers unlimited data if customers also subscribe to DirecTV service. But as for Verizon, even as others come to the realization that today’s data limits will not be sustainable for much longer, the company appears to be digging in.

Related: Verizon bumps up plans, prices, and offers data rollover

Maybe not surprisingly, as the guy in charge of Verizon’s finances, it does come down to money. Shammo argued that there is no way to “make money in an unlimited video world,” pointing to the restrictions that other companies put on how you can use your data, so as to prevent network overload. In other words, your unlimited plan really isn’t.

Both T-Mobile and Sprint place restrictions on video quality on their unlimited plans, with T-Mobile giving you the capability to upgrade to higher-quality video for $25 more a month. Tethering is also throttled on the basic plans. Verizon says it does not throttle at all. Instead, you just pay for it.

Shammo also pointed the finger at heavy users for the reasons why Verizon still is against unlimited data, saying these customers are the only ones that benefit from these types of plans “and tend to be abusive.” That was often the argument most carriers used just a year ago against unlimited data, but with the explosive growth in streaming content more and more people qualify as heavy users.

A person who spends just 300 minutes per month — think two movies — watching streaming videos eats up 2GB of data, according to Verizon’s own data calculator. Add 60 minutes of streaming audio to and from work and that doubles — and this does not even take into account higher-quality streaming.

The cold reality of streaming’s increasing popularity is likely the reason why T-Mobile rolled out its Music Freedom and Binge On data-free streaming options, and why others like Sprint have followed suit. But not Verizon.

But while slamming unlimited plans, Shammo also left some hope, noting that Verizon is always looking at its competitors, and will “respond when needed.” Let’s hope this isn’t Verizon’s last word on unlimited.